BLACKSTONE Real Estate Income Trust (Breit), the Blackstone fund for affluent individual investors, reported its biggest monthly total return in six months as February’s dividend payments and rising rents offset a decline in property valuations.

Breit’s lowest-fee share class had a total return of 0.7 per cent for the month, bringing trailing 12-month returns to 5.7 per cent, according to a report posted on Tuesday (Mar 14). The share class posted an 8.4 per cent gain in all of 2022 and a 30.2 per cent increase in 2021.

Growth slowed last year as rising interest rates undercut real estate values and the tide of investor inflows reversed into a torrent of redemption requests. Breit restricted withdrawals for the four months through February as redemption demand exceeded monthly and quarterly limits.

In addition to higher income from rent and steady dividends, Breit’s February returns benefited from hedging positions that added value as interest rates rose. Commercial real estate prices fell 1.4 per cent across all asset classes in February and are down 15 per cent in the trailing 12 months, according to Green Street.

After its launch in 2017, Breit grew voraciously, acquiring almost 300,000 housing units, 4.2 million square metres of industrial space, hotels, data centres, shopping centres and other real estates. The fund still has about US$14 billion in liquidity for potential new acquisitions.

“Where you invest matters and the vast majority of Breit’s portfolio is in rental housing and logistics in the Sunbelt,” Blackstone said in a statement.

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Breit’s net asset value decreased to US$70.5 billion after investors withdrew US$1.4 billion last month. The net asset value includes an initial US$4 billion committed by the University of California in January but not a US$500 million follow-up investment from the university. BLOOMBERG